TV Is Losing Ground to the Internet Where It Really Counts

TV Is Losing Ground to the Internet Where It Really Counts

AS A SPATE of new shows from Netflix and Amazon prove that some of the best television being made streams rather than airs, TV will take a financial hit. PwC’s annual five-year forecast for entertainment and media released today has revised downward the growth rate for ad spending on television. Last year, PwC predicted advertising would increase 5.5 percent annually over the next five years; now PwC says that rate will slow to just 4 percent annually through 2019.

And those are just the global figures. In the United States, TV ad spending is growing by just a little more than 3 percent annually on average. By contrast, spending jumped 5 percent between 2013 and 2014, the most recent years that PwC makes available.

Why is this happening now? Blame streaming video services like Netlix and Amazon, which have lured TV watchers away from ad-based programming. PwC lumps these services into a category called home video revenue, which is growing quickly in the United States: it’s expected to jump nearly 15 percent annually for the next five years to hit $16.5 billion by 2019. “A portion of this growth is coming at the expense of the TV advertising market,” PwC director Matthew Lieberman says. People will soon spend more to stream TV show and films than they do to go to the movies, Lieberman explains.

Even so, while growth is sagging, the total spent on TV advertising is still enormous: PwC expects US advertisers to spend $81 billion on TV advertising in 2019.

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